Medicaid Alternative Benefit Plans
& Essential Health Benefits
Barbara Coulter Edwards
Director
Disabled and Elderly Health Programs Group
Center for Medicaid and CHIP Services
Centers for Medicare & Medicaid Services
April 20, 2012
Alternative Benefit Plans Today
 Deficit Reduction Act (DRA) of 2005 created new
section 1937 of the Social Security Act
 Increased flexibility for States to provide Medicaid
coverage through tailored “benchmark” or
“benchmark equivalent” benefit packages to
specific populations
 Mandatory enrollment limited to certain Medicaid
beneficiary groups
Alternative Benefit Plans Today
 Exempt from mandatory enrollment
1.
2.
3.
4.
5.
6.
Blind or disabled
Medically needy/frail
Pregnant women
Terminally ill individuals receiving hospice care
Individuals entitled to benefits under Medicare
Etc..
Alternative Benefit Plans Today
 “Benchmark” coverage is a benefit plan that is either the
same as:
1. Federal employees health benefit coverage;
2. State employees health benefit coverage; or
3. Coverage offered by the health maintenance organization
(HMO) with the largest insured commercial non-Medicaid
enrolled population in the State.
4. Secretary-approved coverage – Any other health benefits
coverage that the Secretary determines, upon application by
a State, provides appropriate coverage for the population
proposed to be provided such coverage
Alternative Benefit Plans Today
 “Benchmark-Equivalent” Coverage
1. Benefit package has an aggregate actuarial value that is at least
equivalent to that of one of the Benchmark Benefit packages
2. Must include coverage for following services:

Inpatient and outpatient hospital

Physician’s surgical & medical

Lab and x-ray

Well baby/well child care (including immunizations)

Emergency services

Family planning services and supplies

Mental health services

Prescription drugs

Other appropriate preventative services as designated by the Secretary
Alternative Benefit Plans Today
 States may provide “benchmark” or “benchmarkequivalent” coverage by obtaining employer sponsored
health plans.
 The State must assure that the employer sponsored
plans meet the requirements of the
benchmark/benchmark-equivalent coverage, including
economy and efficiency.
 A State may provide coverage through a combination
of employer sponsored health plans and additional
benefits coverage provided by the State.
Alternative Benefit Plans Today
 States must assure enrollee access, through
benchmark or benchmark-equivalent coverage or
otherwise, to rural health clinic services and FQHC
services.
 Payments must be made in accordance with the
Medicaid payment provisions for rural health clinics
and FQHC services.
Alternative Benefit Plans Today
States must provide public notice and reasonable
opportunity to comment before submitting
benchmark/benchmark-equivalent plans and/or
requesting changes to approved plans.
Alternative Benefit Plans Today
 11 States, the District of Columbia, Guam and Puerto Rico
have implemented Medicaid Alternative Benefit plans.
 Wisconsin implemented a plan equal to the commercial HMO plan with
the largest non-Medicaid enrollment in the States
 The following States and the District of Columbia implemented
Secretary approved benefit plans:
Connecticut (early option)
Kentucky
District of Columbia (early option)
Minnesota (early option)
Guam (early option)
Missouri
New York
Puerto Rico (early option)
Idaho
Virginia
Kansas
Washington
West Virginia
Alternative Benefit Plans Today
 Effective March 23, 2010
 Optional coverage of newly eligible prior to 2014 (may be
phased in). Benefits must consist of benchmark or
benchmark-equivalent coverage or full Medicaid State Plan
 Benchmark and benchmark-equivalent benefit coverage for
all enrollees must include family planning services and
supplies and comply with mental health parity
 Benchmark-equivalent coverage must include prescription
drugs and mental health services
Alternative Benefit Plans 2014
 Effective January 1, 2014
 New expansion population of adults required to receive
benefits through a Section 1937 Alternative Benefit
Plan
 MAGI eligible adults must receive benefits under
Section 1937 Alternative Benefit Plan
 Any benchmark/benchmark-equivalent plan must
provide at least the essential health benefits as defined
by the Secretary
Alternative Benefit Plans 2014
 Impact
 All States will operate at least one Alternative Benefit Plan
 Each State required to identify EHB plan
 Benchmark plans that can be referenced as EHB
benchmark plans
 State’s largest non-Medicaid HMO
 State’s employee health plan
 FEHPG Blue Cross/Blue Shield plan
 State could also select full Medicaid benefit plan as
coverage package
Alternative Benefit Plans 2014
 Impact
 Allowing multiple Alternative Benefit Plans, EHB reference
plans
 Supplementation of benefits in benchmark may be
required to insure that all EHBs are offered in the State
 No default EHB benchmark plan in Medicaid,
 States required to submit an Alternative Benefit Plan State
Plan Amendment to implement this change
Future Considerations
 Adding the ability for States to offer long-term
services and supports in addition to 1905(a)
services within the Alternative Benefit Plans
 Allowing mandatory enrollment exemptions to
apply to people in the VIII group
 Implementing mental health parity within
Alternative Benefit Plans
 How to keep Alternative Benefit Plans/EHB
“current”
Issuances/Publications
 SMD letter – 3/31/06 - Benchmark Benefit Plan Option
(now referred to as Medicaid Alternative Benefit plan)
 SHO letter – 4/9/10 - New Option for Coverage of
Individuals
 Final rule – 4/30/10 - http://www.gpo.gov/fdsys/pkg/FR2010-04-30/pdf/2010-9734.pdf
 SHO letter – 7/2/11 - Family Planning State Option &
New Benefit Rules for Benchmark Benefit Plans